Outgoing Czech Cabinet May Have Parting Gift for Drivers

The current caretaker Czech government may be on its way out, but before it gets replaced with a center-right coalition cabinet, it’s likely to award a contract for a road toll collection system as one of its final big decisions.

While all attention at least in most local media is devoted to the new cabinet negotiations, at least one company, Austrian Kapsch, is eagerly watching the outgoing transport minister.

Kapsch TrafficCom AG (KTCG.VI), a Vienna-based maker of electronic road toll collection systems currently used in several European countries and South Africa, is seen as a forerunner in the Czech government plans to expand electronic toll payments to cover passenger vehicles.

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Kapsch, whose microwave-based toll collection system competes against satellite technologies offered by companies like Siemens AG, is already helping ensure that trucks weighing more than 3.5 metric tons pay for each kilometer they drive on Czech highways.

Next Tuesday, the outgoing Czech cabinet is scheduled to decide on the plan put forward by Transport Minister Gustav Slamecka of either launching a tender for the electronic toll payment system for passenger cars or awarding the contract to Kapsch based on an option embedded in an earlier deal struck with the Austrian company on the truck toll collection system.

Either way, the ruling on the new toll system for passenger cars will likely be the last major decision by this cabinet before its departure sometime in July.

Eager to find any new source revenue, any Czech government is likely to be keen on using a pay-per-kilometer toll collection system for some 4 million passenger cars registered in the country.

But the shift requires a replacement of the existing system of highway toll stickers, issued for a certain period of time regardless of how many kilometers are driven on toll roads, with battery-powered dashboard-mountable toll devices. Locally, the new devices are known as electronic vignettes.

Last year, the Czech government collected around 3 billion koruna ($160 million) in expressway toll sticker sales to owners of passenger cars and small trucks weighing less than 3.5 metric tons.

By switching to electronic vignettes, the government “may increase its revenue by 20% because [the technology] eliminates problems with toll dodgers,” Karel Feix, the head of Kapsh CZ s.r.o., the Czech unit of Kapsch TrafficCom, said earlier this year.

The critics of the use of an electronic toll system for passenger cars have argued that stickers are much cheaper to produce and sell than electronic vignettes for dashboards. The term “highway vignette” is currently commonly used in Austria and German-speaking parts of Switzerland, where low-tech toll stickers are used for collecting payments from passenger car drivers who use highways.

Nevertheless, the new electronic system would spare passenger car owners the necessity of buying new stickers when old ones expire, with the costs of distributing new electronic devices spread over several years. Moreover, the electronic toll collection dashboard units would reduce payment collection costs by processing toll payments via either direct debits from car owners’ bank accounts, or allowing drivers to top up their toll accounts before hitting the road.

A few catches still lie ahead.

The government’s parting gift, as it has been dubbed by some local media, for toll-road operators like Kapsch could prove politically too sensitive. Czech passenger car drivers loath the idea of paying more than they do now for using Czech highways.

Czech business daily Hospodarske Noviny earlier this week said that, under the pay-per-kilometer toll scheme, one 200-kilometer trip between Prague and the second-largest Czech town of Brno could cost as much as 660 koruna, or about $32. Drivers are unaccustomed to factoring toll costs when tallying how much they pay for their road usage.

Nevertheless, the government would need to seek legislative changes to allow the state-run highway authority to charge passenger car owners for each kilometer driven on local expressways. For now the government is only intending to use the electronic toll dashboard units for time-restricted payments for unlimited highway usage—or simply put, for replacing the low-tech stickers with high-tech vignettes.

The government is trying to warm up the driving crowd to the idea of an electronic toll payment system by promising that, unlike the current stickers issued uniquely for each car, one removable electronic dashboard unit can be used in different cars. This way families with more than one car could save money by making effectively only one toll payment.

Corporate operators of passenger car pools are being lured toward a positive view of the electronic toll payment by promises of better and cheaper ways to monitor the use of company cars by their employees. The electronic dashboard toll units would make it nearly impossible to disguise private carexcursions as business trips.

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